It is recognised that Energy R&D and technological change diffusion are an essential part of any GHG stabilisation policy. However, it appears that the scope and scale of low-carbon technologies envisaged for the future might be limited.
Most are of a specific rather than general purpose nature, with their potential use being restricted to a narrow range of economic activities as, for instance, wind, solar and nuclear energy to power generation, and hydrogen and biofuels to transport.
A recent study, carried on by FEEM, CMCC and OECD, confirms that a broad portfolio of technological options will indeed have to be involved in mitigating climate change. Here a the main findings of this research work:
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- In the attempt of fostering Energy R&D, the carbon priceappears to have a noticeable effect: the path followed to stabilise GHG concentration at 550 ppm induces a four-fold increase in Energy R&D expenditure and investment in deployment of renewable power.
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- If, for technological, political or safety reasons the penetration of nuclear energy and CCS were constrained, overall mitigation costs would rise significantly as some of the few widely deployable abatement opportunities would be lost.
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- Furthermore, R&D focusing on major technological breakthroughs could significantly reduce future mitigation costs
(up to 50%, mainly in the non-electricity sector) and would give a far
greater role to induced technological change in containing such costs.
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- This option would entail however major early investments to see consistent savings in the long run.
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- Lastly, R&D alone is not an effective option to address climate change.
Even under optimistic implausibly large assumptions, no global R&D
policy of any size appears to be able on its own to stabilise carbon
concentrations during this century. A carbon price in line with the
stabilisation objective is essential to allow any technological
breakthrough to enter the market of large scale energy production.
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This post is an extract of the CMCC research paper “The role
of R&D and technology
diffusion in climate
change mitigation: New
perspectives using the
WITCH model” by Valentina Bosetti, Carlo Carraro, Romain Duval, and Massimo Tavoni
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